Real estate investor Sanjeev Sah claims rate hikes will bring him more money

A real estate investor has announced that it is making $200,000 a year in profits from the country’s housing crisis — all thanks to rising interest rates.

Sanjeev Sah, Founder of Investors Dream, owns 10 properties including an office and home in Sydney, three in Perth and five homes in regional areas across the country.

Mr Sah told Daily Mail Australia it was a good time to make money as a property investor after the Reserve Bank of Australia hiked interest rates for a ninth straight month in February, raising the benchmark interest rate to 3.35 per cent.

He says investors stand to benefit if the housing crisis pushes rents higher, but they could also reap profits from their homes if demand picks up after the current price slump — a boom that’s fueled by low housing stocks rather than ultra-low interest rates is driven.

“I want a healthy economy, but what the RBA is doing is helping investors,” Mr Sah said.

“Investors, whether they own 1 property or 10 properties or 100 properties, have benefited because we are in crisis.

Real estate investor and Investors Dream founder Sanjeev Sah (pictured with his wife Illa Gupta and seven-year-old daughter Amaya) said he’s still making money from his real estate portfolio despite rate hikes

Mr. Sah started his real estate investment journey in 2015 after buying two houses in India. He now owns 10 properties in Australia – eight of which he leases to tenants

“The prices are rising. It’s not like I want it, but of course I’m happy with it. I’m getting richer every day – because we have a housing crisis,” he added.

“Demand is so high and there is a supply problem, prices are going up. I mean, it’s a simple economics of supply and demand.’

After immigrating to Australia from India, Mr. Sah began his financial investment journey in 2015 when he realized that working full-time didn’t leave him enough time to spend with his wife and seven-year-old daughter.

He and his wife Illa Gupta bought their first two homes in India before settling in Australia and expanding their real estate portfolio with homes across the country.

He now leases eight properties with a market value of about $5 million and makes a net income of $200,000 a year despite rising interest rates.

“Now that means I’m making $250,000 every year if my capital growth is just 5 percent every year, which I find very conservative,” said Mr. Sah.

‘If [the] The RBA keeps raising interest rates even if I lose $50,000, you know what? I make $250,000… [that] is still a net gain of $200,000 in capital growth.’

Mr Sah said Australians should not be angry with property investors and claimed they were needed to help with the property crisis.

“People either act or they complain, so people have to choose where they want to sit,” Mr Sah said.

“I’m part of this ownership game. I have created some fortune for myself and my family and there is nothing wrong with that. I also rent out eight properties that offer tenants living space.

“There is nothing negative about real estate investors. We’re not the bad guys. We make money, but we also provide housing for the market.

“In fact, we need more of these investors to come to the party so they can buy properties and build houses and then rent them out so that the supply problem is addressed.”

Mr Sah argued the government must introduce policies that encourage investors and the construction sector to buy and build more homes.

“We have a housing crisis and the government is doing nothing. It has plans to build thousands of houses but who will pay for that, the taxpayers?” Mr Sah said.

‘[The government] must come forward and provide us with good guidelines that will bring investors, builders and developers to the real estate party.

“You have to give the investor some trust and subsidies. What they can do is provide subsidies, levy free stamp duties, and even speed up the Council’s approval process for developers.

Mr Sah said Australians should not be angry with property investors and claimed they were needed to help with the housing crisis (pictured one of Mr Sah’s investment properties).

He, the government, should not penalize investors and developers with rules and regulations and provide policies that entice them to build more homes for people to live in (pictured, owned by Mr Sah).

“What we need is to encourage government support for investors and developers to start building houses and granny flats. Support them, then they vote and build more houses.

“Don’t punish us with rules and regulations, but create an environment with more incentives to build housing for people who are struggling to find a place to stay.”

Mr Sah said the passive income – income from rental properties – allows him to spend time with his family and visit his aging parents in India.

Australia needs to build an additional three million homes over the next two decades to provide the necessary infrastructure to accommodate its ever-growing population.

Additional factors such as the Covid-19 pandemic, rising cost of living, surge in immigration, collapse of construction companies and foreign students continue to weigh on the country’s housing market.

From January 2023, the rental vacancy rate fell to a record low of 1 percent, according to SQM Research.

The total number of listings for rent in Australia now stands at 31,592, down from 39,568 in December.

Vacancy rates in Sydney CBD, Melbourne CBD and Brisbane CBD fell to 3.1%, 2.7% and 1.4% in January.

Mr Sah (pictured with his mother) said the passive income allows him to spend time with his family and visit his aging parents in India

SQM Research Managing Director Louis Christopher warned that extremely strained conditions are likely to persist for the immediate future.

“We have previously warned that the months of February and March will be the most difficult time for tenants in the national rental market in many years,” said Mr Christopher.

‘The continued rise in rents is driving rental yields higher, especially as prices fall. If the cash rate rises above 4 percent, homebuyers, including investors, are likely to remain largely out of the housing market.

“As such, investment housing permits will remain in the doldrums, setting us up for another super tight rental market in late 2024 and 2025.”

Source: | This article originally belongs to Dailymail.co.uk